Earthquake risk reduction and land value along geographic boundaries of extremely high-risk urban districts in Tokyo
Author: Mizuki Kawabata, Michio Naoi, Shohei Yasuda
Date: 2023/7/10
No: DP2023-013
JEL Classification codes: R38, C21, Q54
Language: English
[ Abstract / Highlights ]
We examine the impact of earthquake risk reduction on land values along the geographic boundaries of dense urban districts with an extremely high risk of earthquakes (high-risk DUDs) in Tokyo. Our analysis employs a spatial regression discontinuity design that takes advantage of the discontinuity in earthquake risk at the high-risk DUD boundary. Our conservative estimate indicates that removing high-risk DUDs increases land value by 5.2% near the boundary. Moreover, we find that the boundary effect increases as the road width at the boundary widens, suggesting that the sample limited to wide roads mitigates the spatial spillover of fire risk.
We examine the impact of earthquake risk reduction on land values along the geographic boundaries of dense urban districts with an extremely high risk of earthquakes (high-risk DUDs) in Tokyo. Our analysis employs a spatial regression discontinuity design that takes advantage of the discontinuity in earthquake risk at the high-risk DUD boundary. Our conservative estimate indicates that removing high-risk DUDs increases land value by 5.2% near the boundary. Moreover, we find that the boundary effect increases as the road width at the boundary widens, suggesting that the sample limited to wide roads mitigates the spatial spillover of fire risk.